HCMC plans $191 million expansion to downtown campus

Hennepin County Medical Center is planning a $191 million expansion at its downtown Minneapolis campus — a project that should help simplify the hospital’s sprawling footprint.

The new 322,000-square-foot building will be located across from the Emergency Department, and feature primary- and specialty-care clinics, as well as outpatient surgery facilities. Currently, these disciplines are spread among nine buildings that HCMC either owns or leases.

“We’re doing this to improve efficiencies, care and the patient experience,” said Dr. Jon Pryor, CEO of Hennepin Healthcare System Inc. “We’ve been talking about this for over a decade. One, we’re running out of room. Two, we’re not patient-centric, we have people scattered all over, and we need to deliver care in a more efficient way that is centered around a good patient experience.”

Located on 8th St. S. between Park and Chicago avenues, the property slated for the expansion is ­currently home to professional offices, an apartment building and a surface parking lot. The Hennepin County Board recently approved spending $10 million to acquire the property — the project will be financed by bonds issued by the county, with the ­hospital paying down the debt.

The design of the project is still in the beginning stages, but a groundbreaking will likely occur by year’s end, with completion slated for sometime in 2016.

The newest buildings on the HCMC campus were built in the 1970s, and the hospital is expected to max out of space by 2017 — a phenomenon that could stymie future hiring, Pryor said. (The hospital currently employs about 6,000 people.)

Sharon Sayles Belton, chairwoman of Hennepin Healthcare’s board, said in a statement that the project will help HCMC “participate in the continued transformation of the east side of downtown Minneapolis.”

That includes the new $1 billion Vikings stadium under construction on the spot where the Metrodome once loomed, as well as a $400 ­million mixed-use development planned for land once owned by the Star Trib­une near the stadium.

Called Downtown East, the Ryan Cos. project calls for two office towers for Wells Fargo & Co., retail shops and restaurants, a parking ramp, a nearly two-block public park and approximately 200 apartments. A related $100 million project slated for above the parking ramp calls for a 150-room hotel, and another 200 apartments.

Other projects also are planned for the area, including Latitude 45, a $70 million-plus mixed-use development that calls for 320 upscale apartments, restaurant and retail space on Washington Avenue.

The anticipated influx of new residents and employees in an area of downtown that has resisted development in the past three decades “positions HCMC to meet [their] health care needs,” with the new space and “eventual reconfiguration of space in current buildings,” the hospital said.

“Clearly, we think there’s a huge opportunity for HCMC to expand our scope of services for people moving downtown, and we’ll grow with them,” said Scott Wordelman, vice president of HCMC’s Ambulatory Care Administration. He noted that the new facility will be accessible to those coming downtown for care, and to those working and living downtown who may use the skyway system.

A recent report by Cushman & Wakefield/NorthMarq, a Bloomington real estate firm, said the multitenant medical office market ­performed well in the second half of 2013, with vacancy rates falling. “With the arrival of health care reform in 2014, health care systems and large independent practices continue to reposition facilities in an attempt to capture any source of revenue possible from the expanding pool of patients,” the report states. “This means expanding their offerings and locating closer to the communities they serve so they don’t risk losing patients to other institutions.”